[brentfenimore]

CSX4000 South Africa Production Status Jan 14, 2004

This post is not intended to make excuses or place blame onto other parties but rather to update the customer base on the current status of production and provide a brief history of what has happened over the course of the last forty-five days.

In mid November 2003 SAI was informed by CAV that they had sold the properties which had housed the engineering and production of their automotive division and that they would need to be moved out of the facility by January 2, 2004. The initial plan was to move CAV Automotive into a new facility in mid December and continue with the build of both GT40 and Cobra products.

In the last week of November CAV and SAI came to a mutual decision that it would be necessary for the Cobra production to continue at the original facility up until the end of December. The entire focus would need to be concentrated on the Cobra program leaving the GT program dormant until Cobra production was moved into the new facility and production was on track with the original projections that had been forecast by CAV back in September of 2003.

Accordingly Cobra production continued at the automotive facility through December, the first four CSX4000 vehicles were completed and shipped prior to Christmas and the next twelve units were processed through various stages of production.

Meanwhile in early December the principals of CAV and SAI made a mutual decision that due to non-performance, financial constraints and the focus of CAV for 2004, neither party was interested in continuing with the manufacturing agreement between the two companies and that alternate plans would need to be made for future production of the CSX4000 Cobra.

On December 10, 2003 Shelby Automobiles, Inc. made a formal proposal to buy out the CAV Cobra assets to include work in process, component inventory and tooling in order to open a new company and continue with the production of the CSX4000 vehicles in South Africa. The proposal was accepted in late December, a new facility was located and effective January 1, 2004 SAI opened a new company by the name of Shelby Automotive South Africa (SASA) based in Cape Town, South Africa. Between January 2nd and January 10th the SASA team moved all assets into the new facility and officially went back into Cobra production on Monday the 12th.

The four man engineering, production, materials and logistics management team that has been running CAV’s Automotive Company for the past two years as well as the production technicians from both the GT40 and Cobra platforms have left the employment of CAV and are now employed by SASA.


SASA is utilizing the same composites, paint, casting and machining outsource suppliers used by CAV for the past few years and SASA will be reporting directly to SAI on all future Cobra production and engineering. We have a strong team at SASA and the quality of the product will meet or exceed the same standards that have been established by the products built by SAI in the US.

Shelby Automobiles, Inc. has been forced to take things into their own hands in order to get on track with the manufacturing of CSX4000 427 S/C Cobras in South Africa. Although on the short term this has created setbacks in delivery of the product to the end users we believe it is in the best interest of both SAI and the customers in the future.

Unfortunately due to the sensitive nature of the agreement we were not able to release the details of the asset acquisition and formation of the new company until the agreement became formal on Tuesday January 13th. We will be posting additional information, photos and production schedules on our owners forum over the course of the next week so we can get all customers up to speed and comfortable with their Cobra purchase going forward. It is unfortunate that we can not give access to all CC members however we feel that the owners deserve the information on a private basis and that they will update the CC community on their findings and feelings.

SAI will of course continue to keep all informed with posts on CC with progress reports when appropriate.

Thanks,


R Brent Fenimore